Bowles v. Warner Holding Co.

• Decision Date: 31 October 1945
• Docket Number: No. 13087.,13087.
• Citation: 151 F.2d 529
• Parties: BOWLES, Adm'r, v. WARNER HOLDING CO.
• Court: U.S. Court of Appeals — Eighth Circuit

151 F.2d 529 (1945)

BOWLES, Adm'r, v. WARNER HOLDING CO.

No. 13087.

Circuit Court of Appeals, Eighth Circuit.

October 31, 1945.

R. M. McCareins, Special Litigation Counsel, OPA, of St. Paul, Minn. (George Moncharsh, Deputy Adm'r for Enforcement, OPA, Fleming James, Jr., Director, Litigation Division, OPA, and David London, Chief, Appellate Branch, OPA, all of Washington, D. C., Harry Witherell, Regional Litigation Atty., OPA, of Chicago, Ill., and Harris Nuernberg, Dist. Enforcement Atty., OPA, of St. Paul, Minn., on the brief), for appellant.

R. H. Fryberger, of Minneapolis, Minn. (M. R. Keith and G. W. Townsend, both of Minneapolis, Minn., on the brief), for appellee.

Before GARDNER, SANBORN, and THOMAS, Circuit Judges.

SANBORN, Circuit Judge.

This is an action brought by the Administrator of the Office of Price Administration, under § 205(a)¹ of the Emergency Price Control Act of 1942, 56 Stat. 23, 33; 50 U.S.C.A.Appendix, § 925(a), to compel compliance with § 4(a)² of the Act. The question for decision is whether the District Court erred in refusing to order the defendant (appellee) to tender to tenants, from whom it had collected rentals in excess of the maximum permitted by the applicable regulation, the amounts which they had been overcharged.

The appellee, Warner Holding Company (which will be referred to as "defendant"), owns eight apartment buildings in the city of Minneapolis, containing about 280 dwelling units. Maximum Rent Regulation 53 (7 F.R. 8596), redesignated as "Rent Regulation for Housing" (8 F.R. 7822), prescribed, on and after November 1, 1942, maximum rents for defendant's housing accommodations. Between November 1, 1942, and June 29, 1943, the defendant demanded and collected rents in excess of those permitted by the regulation. For some time prior to June 29, 1943, the defendant had knowledge of the amounts of the overcharges collected and of the tenants from whom the overcharges had been collected. The defendant has failed and refused to tender to such tenants refunds of the overcharges.

The Administrator commenced this action on February 13, 1943. On June 29, 1943, the District Court granted a preliminary injunction against the defendant, restraining it from collecting rents in excess of those permitted by the regulation. Brown v. Warner Holding Co., D.C., 50 F.Supp. 593. After a trial in May, 1944, the court found the issues in favor of the Administrator, and entered a judgment granting him the injunctive relief which he sought, except that the court denied the prayer of the Administrator that the defendant be required "to tender to such persons as are entitled thereto a refund of all amounts collected by defendant from tenants as rent for the use and occupancy of housing accommodations in excess of the maximum rents established by said Regulation, provided, however, that defendant shall not be required to make such tender to any person who has commenced an action against defendant under Section 205(e)³ of the Emergency Price Control Act of 1942 alleging the collection by defendant of rent in excess of the maximum rents established by said regulation."

The Administrator has appealed from that portion of the judgment which denied his prayer for an order requiring the defendant to tender refunds of overcharges.

The District Court, in effect, construed the Act as providing two specific civil remedies or causes of action, the first, under § 205(a), in favor of the Administrator, for injunctive relief to enforce compliance; and the second, under § 205(e), primarily in favor of persons who had been overcharged, to obtain adequate redress and the expense of procuring it. The court was of the opinion that these remedies were intended to be and were exclusive of other civil remedies to enforce compliance or to redress past violations, and that § 205(a) did not, either expressly or impliedly, authorize the Administrator to apply for, or the court to grant, an order requiring the defendant to tender refunds of rental overcharges collected from its tenants prior to June 29, 1943, the date when the defendant was, by the preliminary injunction, compelled to desist from demanding rentals in excess of the maximum.

The contention of the Administrator is, in substance, that by § 205(a) the District Court was granted complete power to effectuate the policy and purpose of the Act; that a proceeding under § 205(a) is an appeal to the equity jurisdiction of the court and to its discretion (Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587, 88 L.Ed. 754); that language in other statutes authorizing the court "to prevent and restrain violations" has been held to confer full equity powers upon the court to effectuate the purposes of the statute (United States v. United States Steel Corporation, 251 U.S. 417, 452, 40 S.Ct. 293, 299, 64 L.Ed. 343, 8 A.L.R. 1121; United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 64 S.Ct. 805, 88 L.Ed. 1024; Walling v. Miller, 8 Cir., 138 F.2d 629, 633; Fleming v. Alderman, D.C.Conn., 51 F.Supp. 800; Walling v. O'Grady, 2 Cir., 146 F.2d 422); that plenary jurisdiction to effectuate the policy of a statute includes power to restore the status quo; that this enforcement action is a statutory proceeding in the public interest looking to public ends, to which the right of jury trial does not apply (Agwilines, Inc., v. National Labor Relations Board, 5 Cir., 87 F.2d 146, 151); and that the remedy given by § 205(e) of the Act to those who are overcharged does not affect the power of the court, in an action brought under § 205(a), to order restitution to effectuate the purpose of the Act.

The defendant argues that there is no language in § 205(a) to justify a conclusion that the court was granted the power to order restitution of overcharges; that the plenary power granted to effectuate the purpose of a statute must be predicated upon jurisdiction of the subject matter and of all interested parties; that, since the rights of tenants are here involved, no order of restitution could be entered in the absence of jurisdiction over them; and that equitable relief to restore status can be had only as between those who are parties to the action.

The problem presented is one with respect to which there is a difference of informed opinion. The views of the District Court and of the defendant find support in Bowles, Administrator, v. Skaggs, D.C.W.D.Ky., 59 F.Supp. 4. The case of Office of Price Administrator v. Georgian Hotel Co., D.C. Mass., 60 F.Supp. 155, sustains the position of the Administrator. The Administrator is of the opinion that the concurring opinion in Walling v. Miller, 8 Cir., 138 F.2d 629, 633, and the cases of Fleming v. Alderman, D.C.Conn., 51 F.Supp. 800, and Walling v. O'Grady, 2 Cir., 146 F.2d 422, all of which dealt with the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., clearly indicate that the District Court had the power to order restitution of overcharges in connection with granting injunctive relief.

That the reparation order which the Administrator sought would have been in the public interest, would have been appropriate, and would have required the defendant to do no more than it should voluntarily have offered to do to bring itself into compliance with the Act from the time the rent regulation became effective, is, we think, beside the point. The question is whether Congress in § 205(a) of the Act authorized the Administrator to apply for, and empowered the court to grant, reparation orders as a means of enforcing compliance with the Act.

The Administrator is seeking to enforce a right created by the Act. Concededly, he is proceeding in his own behalf under § 205(a). That section, which is sufficiently specific, governs the procedure in enforcement actions brought by the Administrator in both state and federal courts, and it is fair to assume that the language of the section expressed with substantial accuracy the intent of Congress as to the nature of the remedy which the Administrator was authorized to seek from the courts in order to enforce compliance with the Act. See Hecht Co. v. Bowles, 321 U.S. 321, 330, 64 S.Ct. 587, 88 L.Ed. 754. At the time this legislation was enacted, Congress apparently believed that the remedy afforded the Administrator by § 205(a) to enforce compliance by procuring injunctive orders or their equivalents (see Hecht Co. v. Bowles, supra, page 328 of 321 U.S., page 591 of 64 S.Ct., 88 L.Ed. 754), and the remedy furnished by § 205(e) to those who were overcharged and were entitled to sue (and to the Administrator if they were not entitled to sue) to recover damages and expenses, would constitute adequate civil remedies to effectuate the purposes of the Act. Evidently it was found that § 205(e) as originally enacted was ineffective, and it was therefore amended so that the Administrator might enforce the remedy provided by that section if the persons who were entitled to it failed to act promptly. The fact that Congress amended § 205(e) so as to enlarge the right of the Administrator to secure the reparations therein provided for, militates against his contention here that under § 205(a) he always had the...